Wisemore v. First Nat. Life Ins. Co. , 190 La. 1011 ( 1938 )

In my opinion, plaintiff's petition does not disclose a cause of action against the defendant insurance company. Corporations are, under some circumstances, liable in damages for libels published and slanderous words spoken by their agents and employees. But this, in my opinion, is not a case where the corporation is liable.

The reason is that the petition, read as a whole and with all its parts construed together, does not show that Hill's alleged slanderous remarks about the plaintiff were uttered in connection with any duty contemplated by his employment or in connection with any business he was employed to transact for his principal. He was employed by the insurance company to write insurance and to collect premiums. He met plaintiff at Dudley's place and there said, in the presence of Dudley and others, that plaintiff was a thief and had been discharged by the defendant insurance company on account of defalcations.

In the leading case of Williams v. Pullman Palace Car Co., 40 La.Ann. 87, 3 So. 631, 634, 8 Am.St.Rep. 512, this court quoted with approval the following from Cooley on Torts, page 536:

"The test of the master's responsibility * * * is not the motive of the servant, but whether that which he did wassomething which his employment contemplated, and something which,if he should do it lawfully, he might do in the employer's name." (Italics are mine.)

That is the true test of responsibility in all cases of this kind, and all the courts and text writers have recognized and applied it. Applying that test, the court in the Williams Case held that the car company was not liable in damages to the plaintiff, who was assaulted by one of its porters. The porter was defendant's employee, and his acts were "unlawful and tortious". But it was held that there was no liability because the unlawful and tortious acts of the porter were not committed in the exercise of the functions of his employment, or, as the court pointed out, plaintiff's case did not meet the test of Article 2320 of the Revised Civil Code, which says that masters and employers are answerable for the damages occasioned by their servants and overseers "in the exercise of the functions in which they are employed".

The porter in that case was a menial servant, employed to clean up the car, to keep it in order, to wait on passengers, and had no connection with the enforcement of the rules of service. The court said that the assault committed by him on the plaintiff was as completely outside "the functions in which he was employed" as could be imagined.

The same is true, I think, in the case at bar. Hill was an employee of the defendant. But his slander of plaintiff was outside "the functions in which he was employed". It was not "something which his employment contemplated" or something which, if he should have done it lawfully, he might have done in his employer's name.

The majority opinion in this case goes far beyond the ruling in any of the cases cited in support of it, or in any of the cases I have been able to find after considerable research. The ruling, in my opinion, is calculated, if followed as a precedent, to work very great hardship in many cases on employers. As Judge Cooley in his work on torts says:

"It will readily occur to every mind that the master cannot, in reason, be held responsible generally for whatever wrongful conduct a servant may be guilty of. A liability so extensive would make him guarantor of the servant's good conduct, and would put him under a responsibility which prudent men would hesitate to assume."

Time does not permit a review of the cases. But the following statement by this court in Valley v. Clay, 151 La. 710, 92 So. 308, clearly sums up the ruling of this court on the question of the liability of masters for the torts of their servants. After citing numerous cases, this court said (page 309).

"The rule, as laid down in all these cases, is that, for the master to be liable, the injury must have been caused by some act expressly or by reasonable implication within the scope of the agent's employment."

In the case of Godchaux v. Texas P.R. Co., 144 La. 1041, 81 So. 706, the leading cases on the subject were reviewed, and this court said (page 707):

"It is not enough, however, to support the doctrine of respondeat superior, that the quarrel that resulted in the tort committed by the servant arose from and out of the business which he had authority to transact, and that he was acting within the scope of his employment at the moment when he stepped aside from the business of his master to commit the wrongful act on his own behalf and without regard for the business of the master. The responsibility of the master for a tort committed by his servant does not depend upon whether the tort was committed in the course of the employment; the test is whether the tort was committed within the scope of the employment. The doctrine of the common law is the same as the rule expressed in the Civil Code, viz.: Masters are answerable for the damages occasioned by the fault of their servants, ``in the exercise of the functions in which they are employed.' R.C.C. arts. 2315, 2317, 2320."

Plaintiff alleges in his petition that Hill, the agent of the defendant insurance company, slandered him while in the course and scope of his employment. But the facts alleged elsewhere in the petition clearly show, in my opinion, that that is not true. The bare allegation that an agent's acts are done in the scope of his employment is only a conclusion of the pleader. Hale v. Gilliland Oil Co., 151 La. 500, 91 So. 853.

In the early case of Henry Etting v. Commercial Bank of New Orleans, 7 Rob. 459, 464, this court said:

"The true rule seems to be, that when the agent acting in the capacity bestowed upon him by the corporation, and in discharge of some duty or employment directed by the employer or incidental to his situation, does an act that causes damage to an individual, the body corporate is responsible; but where the agent does any act of his own free will, without reference to his functions as a corporate agent, then the corporation is not responsible. For example, if a person should go into a banking house or an insurance office, and there get into a difficulty, or dispute in relation to business of the corporation, with an agent or officer, and an assault and battery should ensue, we suppose it would not be seriously contended that the bank or office was answerable in damages, unless there was some express recognition of the act. Articles 430, 431, 433, 434, of the Code, prove this position to be correct. We suppose a bank could not maintain an action for damages against an individual, if he were to say that it was insolvent, or had issued more notes than it was authorized by its charter. If this be so, it would be unjust to make it responsible for an unauthorized accusation made by one of its officers against another person."

In an earlier case, Ware v. Barataria and La Fourche Canal Co.,15 La. 169, 35 Am.Dec. 189, the court said:

"When an agent, losing sight of the object for which he is employed, commits wrongs and thereby causes damage, the principal is no more answerable for them than any stranger; as to such wrongs, the agent must be considered as acting of his own will and not in the course of his employment, or under any implied authority of his principal."

It is true, as pointed out in the majority opinion, that the earlier doctrine that as a rule corporations are not liable for the wilful wrongs or trespasses of its agents has been greatly modified. But the rule laid down in Article 2320 of the Code, that masters and employers are answerable for the damage occasioned by their servants "in the exercise of the functions in which they are employed", has never been modified. That is still the law.

In the case of Joseph Vowles v. M.F. Yakish et al., decided by the Supreme Court of Iowa and reported in 191 Iowa 368, 179 N.W. 117, 13 A.L.R. 1132, it was held that:

"The mere fact that an insurance adjuster, while attempting to adjust a loss, charges an insured with burning his own property, does not render the insurance company liable if the subject-matter in controversy was not the origin of the fire, but the value of the stock."

This is a most illuminating opinion, citing many authorities touching the question as to what are considered acts within the scope of an agent's authority. Following this case as reported in A.L.R. is a most interesting note under the heading "Liability of insurance company for libel or slander by its agents or employees".

I dissent.